Potential benefits in application of blockchain in real estate industry include:
- accurate land titles;
- faster and cheaper transactions;
- higher liquidity;
- cross-border simplification;
- reduce fraud;
- fractional ownership
Blockchain may increase liquidity in property markets is through a process of “tokenization”, or “unitisation”. Enabling buyers to trade “units” in real estate online, the impact of this on markets and pricing is potentially far greater than removing frictions from the sale process.
Banks and mortgage companies will offer a more streamlined and efficient service to home owners, and they will mostly benefit from a simpler “backend” to handle titles and transactions.
The increase in transparency and auditability has potential to reduce fraud (mortgage fraud, title fraud, etc). However consumers may not notice it (the Fireman’s paradox: when you have fewer fires, you think the Fireman is lazy and useless, you never notice the fire prevention policy itself).
Liquidity premium offered by asset tokenization will also vastly benefit everyone in the real estate industry some companies more than others), and bring large gains to first movers.